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Re: cal_pn post# 132774

Thursday, 04/02/2009 10:01:17 AM

Thursday, April 02, 2009 10:01:17 AM

Post# of 704570
I'm not sure you understand M2M. It's created a negative feedback loop in the financials, one property sells 10% less, banks have to mark down all properties in that area by the same amount. So the bank marks down properties in that area, and all the sudden, they're undercapitalized, so they pull back on lending, which prevents more people from buying, and prices fall further. And then another property sells 5% less, and so on.

It worked great on the way up, but its been a disaster as prices fall.

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